Forex trading is an increasingly popular trading option for new traders due in part to the heavy promotion of courses on this topic. After all and as many course advertisements will point out, Forex has low capital requirements, is relatively easy to do, comes with fairly low trading commissions, involves low margin requirements and trading can be done 24 hours a day.
However, we believe that if you take a comprehensive stock trading course, you will probably think twice before trading using this method for the following reasons:
Forex trading is largely unregulated. For starters, a good stock course will point out that trading is often done on unregulated exchanges or through brokers and banks. On the other hand, currency futures and Forex futures will be traded on regulated exchanges while futures themselves are subject to far more regulations than foreign exchanges.
Forex trading is subject to a large number of scams. In addition, a good stock trading course will note that this type of trading, due to being less tightly regulated, has been the subject of a number of scams - from brokers who are less than honest to trading products such as robotic trading software that promises outrageous profits. On the other hand, stock and options trading has been the subject of much fewer scams due to better regulations.
Accounts are not covered by depositor insurance. A good stock trading course will also point out that these trading accounts themselves are not subject to any form of protection. On the other hand, a stock or futures account will be completely protected against any broker or bank failure.
Not particularly transparent. Moreover, a good stock trading course will note that trading is not particularly transparent. On the other hand and with stock and options trading, there is 100% transparency as all parties involved will see the same prices at the exact same time.
Higher spreads. A good trading course will explain how this type of trading comes with higher spreads - specifically 3 ticks. In other words, it's less than accurate to claim that Forex trading is commission free when it comes with higher spreads. On the other hand, liquid options trading contracts will usually come with a spread of just 1 tick.
Does not exactly come with guaranteed fills. Finally, a good trading course will explain that the only way to guarantee fills is for the dealer to be the buyer and seller of last resort. And if the Forex dealer does not have a dealer desk, then a bank is the buyer and seller of last resort, but banks are also unregulated when it comes to Forex. On the other hand and with other types of trading, the exchange will be the buyer and seller of last resort.
The bottom line: Take a comprehensive stock trading course that covers both stocks and options and stay clear of any type of Forex trading course that makes outrageous promises.
Take the time to understand stock trading before investing your hard earned money. To learn more about Stock Trading Courses, check out our website.
http://stocktradingcoursesinfo.com/
No comments:
Post a Comment